The step up lease is a type of lease intended to help businesses acquire the most modern equipment without causing a negative impact on their cash flow. It is particularly of great help to startups because as they are expected to gain in terms of sales volumes in future, the step up lease would prove to be very convenient.

In a step up lease, payments are very low initially and are then gradually ''stepped up'' to a higher, standard payment. The lease payments are increased at specific (predetermined) intervals over the course of the lease. Payment increases can also be determined by periodic assessments at stated times. Lower initial payments enable better handling of cash flow while profits increase. The step up lease is often used for costly equipment like digital printers or copiers.

The step up lease is a good lease option for not just startups but for any business whose funded assets will become financially greater over time. Options available to a lessee at the end of a step up lease include Fair Market Value (FMV) and $1 buyout. The FMV option allows the lessee to buy the leased asset at its fair market value while the $1 buyout option enables him/her to buy it for $1. Lease payments for a $1 buyout are higher than those for an FMV option as well.

If you are in need of a step up lease, please contact Graphic Savings Group at 203.336.4034 or e-mail us at mail@graphicsavings.com.

Labels: equipment lease, equipment leasing, step up lease, step-up lease